Closing of the Inbot platform

I have some sad news for you.

As of Friday 25.10.2019, the board of directors of Inbot have decided to shut down the InToken wallet and end our token-based platform and service offering, effective 31.10.2019.

The reason for this closure is that our current wallet service and platform is not in compliance with the new cryptocurrency regulations of Estonia, and we are not able to make a large enough investment to stay compliant. The Estonian regulators have given until 31.12.2019 for the tokens filed under the old regulation to refile for compliance under the new regulation.

We tried to look for multiple solutions for this during the past months, and at times we thought we had found one. In the end, we weren’t able to find a meaningful solution that would both make us compliant and also give us a meaningful path to a successful future. Given this information, the board saw it prudent to shut down the platform.

The short term outlook for InToken is that it has lost all value. Since the token will live on the Stellar blockchain regardless of the existence of centralized wallet service, we will continue to research any new use cases that can be implemented in a decentralized manner, or in a centralized manner in compliance with the laws and regulations across the world.

We had a dream of making the world of business more about trust. Our AI-powered People Graph database was in the core of our mission. We believed that finding the most trust-building path to customers is the best way to do business, and we fought for it through multiple major obstacles.

When building startups, timing is very important. We had some really bad luck with our timing. Here’s a short recap of the history of Inbot.

1. Our initial beta product was an automatically interlinked mobile address book that enabled people to search for contacts across address books, and ask for your friends to share the contact you wanted to reach out to. Unfortunately, our first contact graph died from an unexpected data cancer, which forced us to rebuild the whole architecture and graph from scratch in 2014.
2. In 2015, we built an AI assistant chatbot as our first commercial product, only to find out that the major social networks that we used for data enrichment shut down their APIs at the time of our launch. This forced us to build a new way to enrich the contacts for delivery, which required much more complex technology.
3. In 2016, we also found out that a networked address book won’t be compliant with then announced upcoming GDPR regulation, and had to rethink the networked address books strategy altogether.
4. We decided to build an intro service and community based on a GDPR compliant way to store personal data, which we launched in 2017. This enabled us to start growing revenue, and we had a total of 200,000 euros of revenue during that year. We also saw very high conversion rates from properly made intros to customer deals, reaching up to 50% for some of our partners.
5. However, we had severe scalability issue with international reward payments, and too much manual labor involved in the delivery process. We decided to implement a cryptocurrency to be able to automate the payments and scale the platform. We also saw an opportunity to finance our growth and provide liquidity to our investors with an Initial Coin Offering (ICO).
6. We launched InToken in the beginning of 2018, only to narrowly miss the time window of the ICO boom. We had 4 million dollars worth of ICO investment reservations in February 2018, and by the time we got our KYC process implemented at the end of March 2018, they were all gone and we had entered a crypto winter. We ended up canceling the ICO in July 2018 and moved our token to the Stellar blockchain later in 2018.
7. During 2018, our revenue hit 480,000 euros with continued high conversion rates for customers we served. However, we were totally overwhelmed with the amount of work, as we only had a small team dealing with massively increased complexity. Due to continued working capital crunch, we failed to serve many of our customers properly. With hard work, perseverance and sometimes at a high personal cost, we still managed to find a way around these obstacles.
8. During 2019, we tried to figure out a way to scale the platform and increase the liquidity of the InToken. All of the trustworthy options for listing, i.e. reputable large exchanges, were beyond our reach financially. We tried to find ways to raise funding for this, but the barrier of entry had gone beyond our reach in terms of our fundraising ability.
9. The tightening of the regulations in 2019 was the last straw for us. We would have had to not only file for utility token status, but also to comply with currently much stricter AML regulations in Estonia, which would have required major new investments to our software, processes and legal costs.

I’m sorry that we couldn’t reach our goal and realize our mission. But I still believe in our original dream and mission. Business is better with trust.

What happens next?

We will continue to study, whether the People Graph technology we built can be meaningfully leveraged for another type of business without the tokens. We have discussed possible acquisition with multiple parties during the past months, but so far, due to the current complexity and uncertainty of the regulatory environment for cryptocurrencies, we haven’t been able to find a suitable candidate to make such an acquisition.

On 26.10.2019,

Mikko